Euro gains as ECB official says it isn’t overvalued; yen weakens

The euro rose against the majority of its 16 most-traded peers after European Central Bank council member Jens Weidmann said the currency isn’t seriously overvalued.

The shared currency extended gains against the dollar after Weidmann, who heads Germany’s Bundesbank, warned governments against trying to weaken the euro. The yen approached the weakest since May 2010 vs. the dollar as Economy Minister Akira Amari was reported by Kyodo News as saying the government should persevere with efforts to boost stocks. Sweden’s krona strengthened amid a forecast for the Riksbank leave the benchmark rate unchanged.

“A lot of the move has to do with the Wiedmann comments,” Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York, said of the euro in a telephone interview. “Comments from German officials might hold a little more weight because they represent the largest economy in the euro zone.”

The shared currency rose 0.4% to $1.3415 at 2:27 p.m. New York time after declining to $1.3325, the lowest since Jan. 24. The yen fell 0.8% to 93.42 per dollar after reaching 94.06 on Feb. 6, the weakest since May 5, 2010. Japan’s currency dropped 1.1% to 125.29 per euro.

The yen has dropped 20% in the past six months, the worst performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has fallen 2.1% and the euro has added 7.9%, the biggest gain.

Nordic Currencies

The krona gained against all major counterparts before policy makers meet on Feb. 13, when they will leave the benchmark rate unchanged at 1%, according to a Bloomberg survey. Sweden’s currency appreciated 0.9% to 6.3906 per dollar and gained 0.5% to 8.5724 per euro.

The Norwegian krone added 0.6% to 5.5013 per dollar after a report showed a measure of inflation unexpectedly accelerated in January. Annual underlying inflation, which adjusts for taxes, fees and energy prices, picked up to 1.2% from 1.1% in December, Oslo-based Statistics Norway said.

Britain’s pound fell vs. all major counterparts after an industry report showed U.K. employment confidence declined in January and as traders cut bets the currency would strengthen. Sterling declined 0.8% to $1.5674 and 1.2% to 85.57 pence per euro.